Firm has prioritised the development of a new baby SUV over the next S40

Volvo has prioritised the development of an entry-level SUV as part of a broader future model strategy instigated by its new boss, Stefan Jacoby.

Aimed at significantly increasing sales in Europe, where Volvo has seen market share plummet in recent years, the new four-wheel drive is also being looked upon to provide a basis for planned production activities in China following the Swedish car maker’s recent purchase by Geely.

The compact SUV, due to hit UK showrooms by the end of 2013 and be sold under the name XC30, has been conceived to compete on performance, features and price with the new BMW X1 as well as the upcoming Audi Q3 and a junior off-roader presently under development at Mercedes-Benz, expected to be called the GLC.

Read more on Volvo's future plans

Based on a four-wheel-drive version of the existing C30’s contemporary unitary platform, known internally as the P1 structure, the XC30 is being conceived to provide Volvo with increased appeal among younger buyers.

It’s also being designed to provide the sort of profitability achieved by the XC60, the company’s best-selling model.

Insiders describe the five-seat XC30 as being instantly recognisable as a Volvo with an appearance “in the mould of the XC60 but with added visual dynamism and a class-leading interior”.

At around 4350mm in length, the new Volvo is 280mm shorter than the two-year-old XC60. The XC30’s prioritisation has come at the expense of the new S40, which has been placed on indefinite hold some 18 months out from its planned introduction in a bid to free up engineering capacity.

Read more on the Audi Q3 that will rival the XC30

Speaking about the decision to delay the five-door S40, Volvo’s new boss Jacoby said: “I’d rather get two or three cars right than attempt to compete in every market segment.”

There may be two different versions of the XC30: a standard-wheelbase version for Europe and a stretched model for China and, perhaps, North America.

The move would mirror the strategy of Jacoby’s former employee, Volkswagen, whose Tiguan is sold with a 2605mm wheelbase in Europe but is lengthened by 115mm to 2720mm for sale in China.

Greg Kable

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Our Verdict

Volvo XC60
The Swede's XC60 compact SUV is a rival for Range Rover's Evoque

Volvo is justifiably proud of its different approach, and the usable, attractive XC60 is good enough to stand out in a very able compact SUV crowd

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